On 22 January 2025, the Department of Employment and Labour published the Draft Code of Good Practice on Dismissal (draft Code), for public comment.
The purpose of the code is to provide guidance to employers, employees, trade unions and persons applying the code on the legal obligations under the Labour Relations Act, 1995.
The intended changes affect small employers, dismissals linked to poor performance, misconduct, participation in unprotected strikes and operational requirements.
The most significant changes are highlighted below.
SMALL BUSINESSES
Small businesses are excluded from complying with the Code where it is not reasonably practicable or feasible. The draft Code proposes that the circumstances of a small business must be taken into account when determining the fairness of a dismissal. Small businesses are not expected to engage in time consuming investigations or pre-dismissal processes.
FAIR DISMISSAL
On the fairness of a dismissal, the draft Code proposes that where a dismissal is not automatically unfair, the employer need only show that the dismissal was for a fair reason and in compliance with a fair procedure. This is in contrast to the current Code, that states that the employer must show that the reason is related to conduct, or capacity or an operational requirement.
MISCONDUCT
The draft Code proposes that medium and larger employers should adopt written disciplinary rules and procedures to establish the standard of conduct required of their employees. This is a change to the current Code which encourages all employers, irrespective of size, to adopt a standard of conduct.
According to the current Code, serious infringements or repeated offences warrant sanctions short of dismissal. The draft Code suggests rather final written warnings or dismissal. The draft further proposes that an employer may depart from rules and procedures if there is justification for doing so.
In terms of the current Code, it is generally not appropriate to dismiss an employee for a first offence, except where the misconduct is serious and makes the continued employment relationship intolerable. The Draft supports this contention, subject to the seriousness of the misconduct, or repeated misconduct.
When deciding on a fair sanction, the draft Code does not limit the guidelines to dismissal, but rather to all sanctions. It adds to the guidelines, by including:
- The importance of the rule or standard in the workplace; and
- The actual or potential harm or damage caused by the employee’s contravention of the rule or standard.
Whilst that is commendable, it does seem contrary to the purpose of the draft Code, which aims to make its application intentionally general. The two additional factors are not limited to dismissal as a sanction, but all sanctions.
To determine whether the sanction of dismissal is the appropriate sanction where the continued employment relationship is intolerable, an employer must in addition include:
- The nature and requirements of the job;
- The nature and seriousness of the misconduct and its effect on the business;
- Whether progressive discipline might prevent a recurrence of the misconduct;
- Any acknowledgement of wrongdoing by the employee and willingness to comply with the employer’s rules and standards; and
- The employee’s circumstances.
The above forces an employer to firstly, admit that the continued employment relationship would be intolerable, and then still justify why it would be intolerable. For a draft Code that means to simplify disciplinary processes, this does not seem to be the case.
In exceptional circumstances, the draft Code suggests that an employer may deviate from some or all pre-dismissal procedures. However, the employer may still need to justify its non-compliance if the employee refers a dispute about the procedural unfairness of the dismissal. The draft Code emphasises that non-compliance will also depend on the type of allegation and the nature and size of the employer. On the other hand, the current Code, is silent on factors that may justify deviation from pre-dismissal procedures.
INDUSTRIAL ACTION DISMISSAL
Under dismissals and industrial action, the draft Code has added more circumstance when determining the fairness of a dismissal, not only that the strike was in response to unjustified conduct by the employer, it also in response to conduct that is unlawful and unfair.
When determining the seriousness of the misconduct, factors to be taken into account include:
- Conduct of the parties to the dispute related to the strike and the conduct by any other person that has a bearing on the seriousness of the contravention;
- The legitimacy of the strike demands;
- The duration and timing of the strike; and
- The harm caused by the strike.
Processes to be followed when an unprotected strike takes place have been clearly set out to include, instances where the employees are represented by a trade union, and where there is no trade union.
Employees who respond to an ultimatum by returning to the workplace in the stipulated timeframe are pardoned from further disciplinary action, whilst those who ignore it, face possible dismissal.
Collective representation is recognised to satisfy procedural requirements in cases of collective misconduct.
PROBATION
The draft Code recognises that probation is necessary for an employer to assess the employee’s performance and suitability for employment.
Suitability of employment is an important addition, as the draft Code realises that an employee should also fit into the company culture.
An employer still has the duty to give the employee reasonable guidance, that is appropriate to the nature and size of the employer and the job. Unlike the current Code, the Draft is silent on processes the employer should follow when they are dissatisfied with an employee’s performance.
INCAPACITY
- Poor work performance
When considering the fairness of a work performance dismissal, the draft Code has added that the required work standard must have been reasonably achievable. The stringent requirements for poor work performance don’t have to be observed for managers, senior employees and highly skilled employees. According to the draft Code, these employees should have the knowledge and skill that enables them to judge their own performance and recognise that their performance is not meeting the required level.
- Ill health, injury and other forms of incapacity
The current Code provides guidelines in cases of dismissals arising from ill health or injury, whilst the draft Code has not included such guidelines. In the draft Code, imprisonment is recognised as a form of incapacity, with the employer encouraged to assess the extent of the incapacity and find alternatives short of dismissal. Incompatibility is seen as an employee’s inability to work in harmony with an employer’s business culture or co-workers and can constitute a form of incapacity justifying dismissal.
OPERATIONAL REQUIREMENTS
The Code of Good Practice on Dismissal Based on Operational Requirements is now incorporated into the draft Code. Most of what is contained in the Code is included in the draft Code, setting out what would be considered fair reasons and fair procedure. On re-employment of retrenched employees, the draft Code does not include a time limit on preferential hiring or oblige an employer to inform representative trade unions of their offers of re-employment.
CONCLUSION
SEIFSA is in the process of carefully perusing the Draft Code and working collaboratively with BUSA will be making submissions on areas that are not clear, require further explanation and/or we are not in agreement with.
The window to make written submissions closes on 24 March 2025
In the interim, SEIFSA urges all affiliated member companies to continue to strictly follow their in-house rules, disciplinary policies and procedures and maintain a strict adherence to the prescripts of procedural and substantive fairness.
